Mortgage Rate Surge Causes Homebuyers to Back Out, Worsening Housing Affordability

The housing market is experiencing a surge in canceled home sale deals, with nearly 16% of agreements being canceled in August, the highest rate since October 2022. Soaring mortgage rates, reaching as high as 7.23% last month, are causing homebuyers to get cold feet. Buyers are getting sticker shock from high rates and additional expenses, leading them to back out even if it means losing their earnest money. Rising home prices and a supply shortage are further complicating the situation, as buyers face increased competition and limited options.